Recent correction overdone; Accumulate for Apple’s share gain and auto/comm. momentum

（以下内容从招银国际《Recent correction overdone; Accumulate for Apple’s share gain and auto/comm. momentum》研报附件原文摘录）
立讯精密(002475)
Luxshare retreated over 10% in the past week mainly due to market concernson Huawei’s Mate 60 Pro launch and news report on iPhone restrictions byChinese government and state companies. We view both incidents do not havematerial impact on iPhone shipment given Mate 60’s limited production capacityand high user stickiness on Apple’s ecosystem. Despite challenging macroheadwinds, Luxshare delivered solid sales/NP growth of 20/15% YoY in 1H23,and we are positive on further share gain in Apple’s iPhone/Watch/AirPodsOEM/component, robust outlook in auto/comm., and better operating efficiencyin 2H23E. We trimmed FY23-25E EPS by 1-6% to reflect lower GPM on mixshift and better growth in auto/comm.. The stock now trades at 18.6x/14.9xFY23/24E P/E (1-sd below 8-yr avg. P/E). Maintain BUY with new TP ofRMB44.9 (based on same 28x FY23E P/E). Upcoming catalysts include iPhone15 launch, Vision Pro ramp-up and auto tier-1 progress.
Solid 2H23 outlook: Apple’s share gain, Vision Pro and strongauto/comm. As the major OEM/component supplier of Apple’s iPhone/Airpods/Watch, we believe Luxshare will benefit from iPhone 15 cycle in3Q23 and continue share gain in top module and iPhone assembly in2H23E. Despite limited contribution from Apple’s Vision Pro in 2H23E, weare positive on gradual share gain in FY24/25E. As we expect auto tier-1business and communications segment to continue strong growth (40-50%CAGR) and overall profitability will recover in 2H23/FY24E, we forecastearnings will grow 24%/25% YoY in FY23/24E.
1H23 in-line with impressive growth in automotive/communications.Luxshare posted 1H23 revenue/NP growth of 20%/15% YoY, in-line withprior profit alert, and pre-announced 3Q23 earnings growth of 3-27% YoY,which is resilient given near-term weakness in smartphone/CE market (83%of FY23E sales). By segment, CE/computer/auto/communication grew 18%/-5%/52%/68% YoY in 1H23. GPM recovered QoQ to 11.3% in 2Q23 (vs.10.0% in 1Q23) thanks to continuously improving product mix (auto/comm.).In particular, Luxcase Precision (casing/top module subsidiary) postedrevenue/NP growth of 14%/18% YoY in 1H23 and NPM improved to 2.0%in 1H23 (vs 1.8% in 1H22).
Recent noise offers buying opportunity; Reiterate BUY. We suggestinvestors accumulate the stock after recent correction on market concernsover Mate 60 Pro launch and potential iPhone restriction by Chinese statecompanies, which have limited impact on iPhone shipment in our view. Thestock now trades at 18.6x/14.9x FY23/24E P/E, close to 1-SD below 8-yearhist. avg. P/E. Reiterate BUY with new TP of RMB44.9 (28x FY23E P/E).